Bitcoin showed little movement on Wednesday, stabilizing after a recent price decline as traders took a cautious approach ahead of key U.S. inflation data, which could influence expectations for interest rates.
The world’s largest cryptocurrency remained within the $90,000 to $100,000 trading range established over the past few weeks, as optimism over favorable regulations under incoming President Donald Trump cooled.
Broader cryptocurrency markets saw significant losses, with risk appetite dampened by escalating geopolitical tensions in the Middle East and Asia. Additionally, profit-taking occurred after a strong performance in November.
By 00:53 ET (05:53 GMT), Bitcoin had risen 0.6% to $97,483.5.
Focus on CPI Data for Rate Guidance
The primary focus on Wednesday was the upcoming consumer price index (CPI) inflation data, which is expected to impact the Federal Reserve’s plans for interest rates.
This data release comes just one week before a Fed meeting, where the central bank is widely anticipated to lower rates by 25 basis points.
However, market uncertainty has grown regarding the long-term outlook for interest rates due to persistent inflation. Trump’s expansionary and protectionist policies are also expected to contribute to inflation, keeping rates elevated in the long run.
High interest rates are unfavorable for speculative assets like cryptocurrencies, as they limit the liquidity available for investment.
MicroStrategy’s Nasdaq 100 Speculation
MicroStrategy Incorporated (NASDAQ: MSTR), the largest corporate holder of Bitcoin, saw its stock rise on Tuesday amid speculation that it could be added to the Nasdaq 100, a move that could potentially drive further gains in its stock price.MicroStrategy’s value surged by approximately 450% this year as its Bitcoin strategy paid off, with the company continuing to issue more debt and purchase additional Bitcoin.
Bloomberg analyst Eric Balchunas noted that if MicroStrategy is added to the Nasdaq 100, exchange-traded funds would likely purchase at least $2.1 billion in MicroStrategy shares to gain exposure.
Crypto Prices Today: Altcoins Mixed After Significant Losses
In the broader cryptocurrency market, most major altcoins showed mixed performance on Wednesday after experiencing heavy profit-taking in recent sessions. However, most tokens were still trading significantly higher year-to-date.
Ethereum (ETH), the second-largest cryptocurrency, dropped 1.1% to $3,661.36. XRP held steady at $2.3368 after recovering from a 10-day low in the previous session.
Solana rose 1.3%, while Cardano and Polygon remained unchanged. Among meme tokens, Dogecoin fell 3.4%.
